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Legal Update

Thai Revenue Department Proposes End to Non Juristic Bodies of Persons

4 November 2009
Mayer Brown JSM Legal Update


The Thai Revenue Department is advocating for non-juristic bodies of persons to be stripped of their status under the Revenue Code in order to prevent abuse and tax evasion.

Full Update

The Thai Revenue Department announced its proposal on 12 October 2009 to remove non- juristic bodies of persons from the list of taxable persons under the Revenue Code. The Ministry of Finance is now considering the proposal.

"Non-Juristic Bodies of Persons" means an ordinary partnership, a group or an association operated by two or more natural persons who do not form a legally recognised entity. Please see more details from this link:

The reasons behind this proposal are two-fold: (i) to prevent abuse by wealthy individuals who set up non-juristic bodies to reduce their personal income tax, distribute their income, take advantage of tax allowances and claim for fictitious expenses; and (ii) to bring the Revenue Code in line with the Civil and Commercial Code, which makes no provision for non-juristic bodies of persons. In fact, the Revenue Department strongly espouses the idea that existing non-juristic bodies of persons should be changed to partnerships or private limited companies.

For the moment, however, it is still possible to establish a non-juristic body of persons, but the approval criteria of the Revenue Department will be stricter. The application must clearly identify the details and intended activities of the non-juristic body, and demonstrate that it will operate in the public interest as a non-profit organisation.

The Director-General of the Thai Revenue Department further noted that the Revenue Department is currently investigating existing non-juristic bodies of persons. Should the facts show that a non-juristic body of persons has been set up with the intention of avoiding tax, the individual members will be liable for a range of civil and criminal offences including tax fraud. Penalties include fines and imprisonment depending on the specific violations.


If the Revenue Department's proposal is implemented, existing non-juristic bodies of persons may in the future be required to register as partnerships or private limited companies to remain in existence. Moreover, individuals seeking to minimise their tax exposure will need to employ new tax planning methods as non-juristic bodies of persons will no longer be an option.

For inquiries related to this Client Alert, please contact:

Chitanong Poomipark ( )

Sivinee Thanapase ( )

Learn more about our Bangkok office, Corporate & Securities and Tax practices.

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